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HMA in Talks to Buy CHP Tennessee Hospitals

Margaret Dick Tocknell, for HealthLeaders Media, May 3, 2011

Health Management Associates announced late Monday afternoon that it is in negotiations with Catholic Health Partners to acquire Mercy Health Partners, CHP's seven-hospital system based in Knoxville, Tenn. No details of the financial negotiations have been disclosed.

The potential sale means CHP would be exiting the Tennessee market. The announcement came on the same day that CHP completed the $150 million sale of Mercy Health Partners of Northeast Pennsylvania in Scranton to Community Health Systems in Franklin, Tenn.

Once the sale of Mercy Health Partners is completed, CHP will still own hospitals in Kentucky and Ohio.

Naples, Fla.-based HMA already owns four hospitals and a surgical center near Nashville. The for-profit company operates 60 hospitals in 15 states, including Alabama, Florida, Texas, Washington and West Virginia.

Last week, Jeffrey A. Ashin, president and CEO of Mercy Health Partners in Tennessee, told employees via an in-house publication that the name of a prospective purchaser would not be announced until Fall. On Monday, however, in a memo to employees and physicians posted on MHP's web site, Ashin announced the move by the health system's board.

According to the memo, the board selected HMA after considering several proposals from unnamed healthcare organizations. HMA's "consistent track record of transforming underutilized hospitals into profitable and superior medical centers" was listed among the reasons for its selection.

In the memo, Ashin said that the name of the health system is expected to change. He said the health system would no longer have an official Catholic affiliation, but that HMA has asked the Sisters of Mercy to continue to serve at the hospital and that despite the acquisition by a for-profit company, the health system would continue to follow its charity care policies.

Ashin's memo did not address any potential management or personnel changes.

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